Dec 6, 2011

Inflation Or Deflation, Gold Will Outperform

From SeekingAlphaDecember 6, 2011
By Robert Hallberg
History has taught us that certain assets perform better during inflation, while other assets thrive in a deflationary environment. There is a common perception that hard assets and commodities do well during inflation and poorly in deflation, whereas and bonds and cash have contrary performance. However, it is a misperception to lump gold into the hard assets category since it performs equally well during deflation.
Gold is a monetary metal with unique characteristics that preserves its purchasing power both during high inflation and high deflation. This is because gold offers protection both against depreciating currencies as well as deflationary busts, bank-runs, insolvency and other deflationary scenarios since it does not have any counterparties.
You will see that gold outperformed vertically all other asset classes both during times of great deflation, between 1929 and 1940, as well as during times of great inflation, during 1968 to 1980.
The chart shows the performance of four different assets; equities, bonds, real estate and gold, during the Great Depression. Government bonds did reasonably well, but gold was the clear winner. Real estate and equities got crushed.
Gold and Deflation
The next chart shows the performance of the same assets during the highly inflationary times of the late 1960s and 1970s. This time real estate did reasonably well, but yet again, gold was the clear winner. Equities were flat and bonds were negative, but if you factor in the high inflation rate to these returns, they also got crushed.
Gold and Inflation
Stocks and bonds have done well during times of low or moderate inflation. The chart shows the performance of these assets during 1982 to 2000, a time of low to moderate inflation. Stocks and bonds were the best performers while real estate and gold did poorly.
Gold and Low to Moderate Inflation
Today, the world is in a struggle between two giant forces of inflation and deflation. On one hand we find ourselves in a great deleveraging process. Economic growth is slow or negative, companies are going bankrupt and countries are on the verge of default. This is highly deflationary! However, on the other side of this equation, governments and central banks worldwide are trying to re-liquefy the system through money printing, quantitative easing, bailouts, and other schemes, and this is highly inflationary.
We are currently at a standstill, and it is not yet certain which of these two forces will prevail in the end. Some parts of the economy, like real estate and derivatives, are deflating, while other parts of the economy, such as up commodities and food prices, are inflating. If deflation prevails, bonds will do well, and if inflation prevails, hard assets should do well -- but in either case, gold will be the clear winner.
In this environment of uncertainly, I recommend retail investors to allocate at least 25% of their portfolio into gold (GLD), and another 10% to senior gold mining stocks, such as Barrick Gold Corporation (ABX), Goldcorp (GG), Newmont Mining (NEM), and Yamana Gold (AUY).

The Obama Regime Has No Constitutional Scruples

Misreading the fight over military detention

By Paul Craig Roberts December 05, 2011 "Information Clearing House

-- During an interview with RT on December 1, I said that the US Constitution had been shredded by the failure of the US Senate to protect American citizens from the detainee amendment sponsored by Republican John McCain and Democrat Carl Levin to the Defense Authorization Bill. The amendment permits indefinite detention of US citizens by the US military.  I also gave my opinion that the fact that all but two Republican members of the Senate had voted to strip American citizens of their constitutional protections and of the protection of the Posse Comitatus Act indicated that the Republican Party had degenerated into a Gestapo Party.
These conclusions are self-evident, and I stand by them. 
However, I jumped to conclusions when I implied that the Obama regime opposes military detention on constitutional grounds.  Ray McGovern and Glenn Greenwald   might have jumped to the same conclusions.
An article by Dahlia Lithwick in Slate article by Dahlia Lithwick in Slate   reported that the entire Obama regime opposed the military detention provision in the McCain/Levin amendment. Lithwick wrote:
 “The secretary of defense, the director of national intelligence, the director of the FBI, the CIA director, and the head of theJustice Department’s national security division have all said that the indefinite detention provisions in the bill are a bad idea. And the White House continues to say that the president will veto the bill if the detainee provisions are not removed. It sees the proposed”
I checked the URLs that Lithwick supplied.  It is clear that the Obama regime objects to military detention, and I mistook this objection for constitutional scruples.  
However, on further reflection I conclude that the Obama regime’s objection to military detention is not rooted in concern for the constitutional rights of American citizens.  The regime objects to military detention because the implication of military detention is that detainees are prisoners of war. As Senate Armed Services Committee Chairman Carl Levin put it:  Should somebody determined “to be a member of an enemy force who has come to this nation or is in this nation to attack us as a member of a foreign enemy, should that person be treated according to the laws of war? The answer is yes.”
Detainees treated according to the laws of war have the protections of the Geneva Conventions. They cannot be tortured. The Obama regime opposes military detention, because detainees would have some rights.  These rights would interfere with the regime’s ability to send detainees to CIA torture prisons overseas.  This is what the Obama regime means when it says that the requirement of military detention denies the regime “flexibility.”
The Bush/Obama regimes have evaded the Geneva Conventions by declaring that detainees are not POWs, but “enemy combatants,” “terrorists,” or some other designation that removes all accountability from the US government for their treatment. 
By requiring military detention of the captured, Congress is undoing all the maneuvering that two regimes have accomplished in removing POW status from detainees.
A careful reading of the Obama regime’s objections to military detention supports this conclusion.  The November 17 letter[PDF] to the Senate from the Executive Office of the President says that the Obama regime does not want the authority it has under the Authorization for Use of Military Force (AUMF), Public Law 107-40, to be codified. Codification is risky, the regime says. “After a decade of settled jurisprudence on detention authority, Congress must be careful not to open a whole new series of legal questions that will distract from our efforts to protect the country.”
In other words, the regime is saying that under AUMF the executive branch has total discretion as to who it detains and how it treats detainees. Moreover, as the executive branch has total discretion, no one can find out what the executive branch is doing, who detainees are, or what is being done to them. Codification brings accountability, and the executive branch does not want accountability.
Those who see hope in Obama’s threatened veto have jumped to conclusions if they think the veto is based on constitutional scruples.

Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. He can be reached at:

Is the war on terror a complete hoax? Paul Craig Roberts reveals how social engineers infected America with mass paranoia

So This Is How Liberty Dies

Clinton Turns to Naked Corporate-Fascism

Global Financial Collapse: What makes it tick?

From RT06 December, 2011
By Adrian Salbuchi

The mind becomes confused and dismayed when confronted with chaotic situations it can hardly figure out - situations such as today’s Global Financial Woes. Maybe we’re looking too close-up. Let’s take a step back and look again...
Complexity is often engineered into what are basically simple problems by people who benefit from manufactured complications and have the power to control them. When money is involved, the powerful people who benefit from ripping off untold millions of hard workers make sure that their “money machine” will just keep steaming ahead. Take the ongoing Global Financial Crisis.
Firstly, it is not a “crisis” at all: what the world is confronted with today is a full-fledged, irreversible and unsustainable Global Financial Collapse that, if not properly addressed, may bring down the whole global economy with it.
Secondly, this has pushed the Real Economy into a “crisis” from which, if proper measures are taken, it can – and must! – be saved.Because all national economies are basically intact (although many have been badly clobbered!) they can be brought back to health.
Thirdly, the real core of today’s problem is that Finance – that virtual world of banking, fractional lending, usury compound interest, fraudulent derivatives, casino-like speculative “investments” and other parasitic and anti-social activities – has illegitimately risen above the Real Economy which is the world of work, production, manufacturing, effort, toil, sweat and creativity.
In numbers, we see that today Finance has grown to be 20, perhaps 30 times larger than the Real Economy.
First Key Question: HOW AND WHY did that happen? 
Easy: all you need to grow Finance is to design a complex, perverse and fraudulent Model that will allow bankers and traders to type in irrational formulae into a Computer Spreadsheet (Spreadsheets never complain: they will compound interest and unsavory profits with no sweat!), so that it churns out “profits” for the few, making them grow and grow and grow. The Real Economy, however, uses WORK as its input, not funny virtual numbers. And work is what runs planet Earth: you need work, talent and effort to build new cars or airplanes or clothes or new homes or roads; work to bake more bread and harvest more food.That’s why the Real Economy can only grow arithmetically, whilst Virtual Finance can grow exponentially… Ah, there’s the rub!
Second Key Question: WHO made that happen? 
Global Power Elite international bankers have been doing this openly, knowing few will understand what is actually happening. I mean, was not it former US Federal Reserve Bank governor Alan Greenspan who, during a black-tie Washington DC dinner of the American Enterprise Institute on 5 December 1996, “explained” away such inexplicable growth as being due to “irrational exuberance”? What a solid technical explanation coming from the then No. 1 Central Banker!
This fraudulent but extremely (and illegitimately) strong Money Power minority controlling Finance today have made it grow like a cancerous tumor. Starting in 2008 with the collapses of Bear Stearns, AIG, Merrill Lynch, Lehman Brothers and the bailouts of Goldman Sachs, CitiCorp, HSBC and Bank of America, Finance today seems to have “metastasized” and now threatens to kill parts of the global Real Economy. So… we had better do something about this, and quickly. And “doing something” means more than just fighting on the streets and throwing rocks at the police (although admittedly, that is often a necessary collective first step).
Finance has usurped the upper echelons which do not legitimately belong to it but rather to the Real Economy. It is the Real Economy that must always be on top because that is where True Value is created. Finance, in turn, must always be subordinated to the Real Economy, not the other way around. This means that today’s key problem is that the whole economic-financial-monetary system is upside down… We need to immediately put it right-side-up again!!
Third Key Question: WHERE to start? 
It starts with each country taking back their central bank so that it will provide the necessary amount of interest-free money to meet the needs of the Real National Economy, so that all the powerful funny-money bankers can be routed. That means freeing your central bank from global banker control.Former Argentine president Juan Domingo PerĂ³n did just that 60 years ago and the Powers That Be bombed him out of power. Muammar Gaddafi did that much more recently, and look at what happened to him….
Money is a Powerful Lord”, 17th Century Spanish poet Don Francisco de Quevedo y Villegas once said. Four centuries later, nothing new under the sun…
Adrian Salbuchi for RT
Adrian Salbuchi is a political analyst, author, speaker and radio/TV commentator in Argentina.

FT Releases Mother Of All Rumors

Montenegro Bought by Rothschild Family

Wednesday, 30 November 2011

Italian media state with certainty that the small coastal nation of Montenegro (pop. 650,000) is completely controlled by companies connected to the Rothschild family, which financed the project for Montenegro's independence, reports local daily "Dan".

It is stated that Nathaniel Rothschild celebrated his 40th birthday in Tivat this summer, and the independence of Montenegro was financially supported by his companies Trigranit, British Petroleum, JNR limited, HM Rothschild, Vanco, Societe Generale and many others.

It is also speculated that foreign investments in Montenegro will grow due to the free economic zone which is promoted by the Government of Montenegro in order to acquire the status of an international centre for companies and off-shore banks.


Thierry Meyssan Reporting from Syria

From 108morris108 5 Dec 2011
Thierry from Voltaire Net brings us up to date from Syria – I hope he will be making regular contributions.

Thierry Meyssan, French intellectual, founder and chairman of Voltaire Network and the Axis for Peace Conference. His columns specializing in international relations feature in daily newspapers and weekly magazines in Arabic, Spanish and Russian. His last two books published in English : 9/11 the Big Lie and Pentagate.